Variance Analysis The budgeting process may be approached differently in various firms.

Variance
Analysis The budgeting process may be approached differently in various
firms. Top-down budgeting has its inception with directives from senior
management who prepare the budget and assess performance based on
objectives established at higher levels. Any additional compensation
received occurs as a result of achieving budgetary targets imposed by
others. In contrast, bottom-up budgeting reflects the predictions of
cost, revenue, profit, and investment center managers—proposed and
approved by senior managers. Incentives are negotiated by managers
proposing the budget rather than imposed by higher-level executives.In a well-written paper demonstrating standards, answer the following questions:1.
Define a flexible budget and describe its use. Under which budgeting
approach would flexible budgets more likely be used, and why?2. What might be the most important consideration in investigating budget variances?3. What are the potential benefits of monitoring direct cost variances?4.
What are the potential benefits of monitoring overhead variances? 5.
Should managers be commended favorable overhead spending, efficiency,
and production volume variances? Rationalize your response.In
addition, include two or three outside references to support your
research and conclusions. Your paper should meet the following
requirements:• 2-3 pages in length• Formatted according to the APA Requirements• Include two or three outside references to support your research and conclusionsReferenceHorngren,
C. T., Datar, S. M., & Rajan, M. V. (2015). Cost accounting: A
managerial emphasis. (15 ed.). Upper Saddle River, NJ: Pearson
Education, Inc. ISBN-13: 9780133428704. Retrieved from .coursesmart.com/9780133428841/firstsection”>http://www.coursesmart.com/9780133428841/firstsection (Horngren, Datar & Rajan, 2015)